U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 20843 / January 6, 2009

Securities and Exchange Commission v. Savvides & Partners/PKF Cyprus, Pavlos Meletiou, R.K. Dhawan and Co., and R.K. Dhawan, Civil Action No. 06 CV 2223 (S.D.N.Y.)

FINAL DEFAULT JUDGMENTS ENTERED AGAINST DEFENDANTS PAVLOS MELETIOU, R.K. DHAWAN AND CO. AND R.K. DHAWAN IN CONNECTION WITH THEIR AUDITS OF AREMISSOFT CORPORATION; EACH SUSPENDED FROM PRACTICING OR APPEARING BEFORE THE COMMISSION AS ACCOUNTANTS IN RELATED ADMINISTRATIVE PROCEEDINGS

On September 23, 2008, the Honorable Charles S. Haight, Jr., of the United States District Court for the Southern District of New York, entered final default judgments against Pavlos Meletiou ("Meletiou") R.K. Dhawan and Co. ("Dhawan and Co."), and R.K. Dhawan ("Dhawan") in connection with their audits of AremisSoft Corporation ("AremisSoft"), a software company that went bankrupt in March 2002. In addition to permanent injunctions entered against each of the three defendants, Meletiou and Dhawan were each ordered to pay a civil penalty of $120,000, and Dhawan and Co. and Dhawan were held jointly liable for disgorgement of $24,488.96 plus prejudgment interest of $14,781.76. On January 6, 2009, based on the entry of the final default judgments entered against Meletiou, Dhawan and Co., and Dhawan, the Commission instituted administrative proceedings against Meletiou, Dhawan and Co., and Dhawan, temporarily suspending each from practicing or appearing before the Commission as accountants pursuant to Rule 102(e)(3) of the Commission's Rules of Practice.

The Commission's complaint, filed March 21, 2006, alleged, among other things, that Meletiou signed unqualified audit reports on behalf of PKF Cyprus, a Cyprus-based accounting firm, for AremisSoft subsidiaries in 1999 and 2000 that falsely stated that the audits were conducted in accordance with U.S. Generally Accepted Auditing Standards ("GAAS") and that the AremisSoft subsidiaries' financial statements were fairly presented in accordance with U.S. Generally Accepted Accounting Principles ("GAAP"). The complaint further alleged that Meletiou was responsible for the audits and reviews of the AremisSoft subsidiaries and that he attended meetings with senior AremisSoft executives in which the AremisSoft financial fraud was openly discussed.

The complaint further alleged that Dhawan and Co., an Indian-based accounting firm, issued audit reports on nine AremisSoft subsidiaries in 2000 signed by its partner R.K. Dhawan that falsely stated that the audits were conducted in accordance with U.S. GAAS and the financial statements were presented in accordance with U.S. GAAP and that the companies' false financial statements were included as part of AremisSoft's consolidated financial statements filed with AremisSoft's year 2000 Form 10-K. The complaint alleged that five of the nine companies were never in fact acquired by AremisSoft and four were shells with insignificant assets, revenues, and income.

The final judgments permanently enjoin Meletiou, Dhawan and Co., and Dhawan from future violations of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Exchange Act Rule 10b-5 and from aiding and abetting future violations of Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act, and Exchange Act Rules 12b-20, 13a-1 and 13b2-1.

For additional information, see Litigation Release Nos. 19622 (March 22, 2006) and 20527 (April 15, 2008).

http://www.sec.gov/litigation/litreleases/2009/lr20843.htm